The International Energy Agency has ordered an inquiry into whether the world could run out of oil, The Observer has learnt. It will consider whether fears about global shortages are real.

Observers say that the IEA, which provides authoritative research to OECD countries, is concerned that the supply of oil could fail to keep up with demand driven by the fast-industrialising economies of China and India. The investigation comes at a time of mounting concern that the sky-high price of oil could derail the global economy and plunge the world into recession. Oil hit $135 a barrel last week, the highest price on record, forcing airlines to cut back on flights to save fuel and pushing up the cost of living around the globe.

Lawrence Eagles, head of oil markets research at the IEA, said the situation was complex but added: 'Our findings will form part of short- and long-term forecasts that we intend to publish in July and November. Up to now we have believed that supply can cope with demand. One caveat is that we don't know for certain whether estimates of reserves in countries such as Saudi Arabia are entirely accurate.'

John Waterlow, analyst at oil research consultancy Wood Mackenzie, said: 'Many oil-producing countries are closed, secretive societies where it can be difficult to pinpoint the level of provable reserves.'

Analysts disagree about cause of the jump in oil prices - some have blamed commodity speculators but others point to surging international demand from Asia and South America as factors that have pushed the price higher.

IEA researchers have warned that even if there is enough oil under the ground, which is probable, supply difficulties could emerge because national oil companies and Western multinationals have failed to invest sufficiently in the equipment and pipelines needed to extract oil and convey it to consumers.

The IEA is worried about an extremely narrow capacity margin by 2012, when demand is expected to have reached 95 million barrels a day. At that point spare capacity could be at just a million barrels a day - which may not be enough to make good any sudden interruption of supply from volatile countries such as Nigeria or Venezuela - or Iraq, which is now estimated to have overtaken Saudi Arabia as the largest holder of reserves.